FY2027-05 Marijuana Retail Tax - FAILED TO ADOPT1
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KODIAK ISLAND BOROUGH
ORDINANCE NO. FY2027-05
AN ORDINANCE LEVYING AN AREAWIDE MARIJUANA RETAIL SALES TAX;
ESTABLISHING THE COMMUNITY WEiL-BE�ir FUND—,AND PROVIDING FOR VOTER
APPROVAL OF THE TAX
WHEREAS, the Kodiak Island Borough seeks to diversify its revenue sources to address
current and future financial challenges; and
WHEREAS, the Assembly desires to establish a revenue source that may support programs
and services benefiting Borough residents without increasing the property tax mill rate; and
WHEREAS, Alaska Statute 17.38 authorizes the legal sale of marijuana and marijuana
products within the State of Alaska; and
WHEREAS, the Assembly finds that a modest sales tax on marijuana and marijuana products
may provide a dedicated source of funding for community benefit programs; and
WHEREAS, it is the Assembly's intent that revenues generated through the Marijuana Sales
Tax be deposited into the Community Well Being Fund General Fund and used to support
programs, services, projects, and grants that promote health, education, and economic
development; and
WHEREAS, the Assembly intends to review the tax and the effectiveness of the GenqmuRity
Well Being FURd General Fund within three (3) years of implementation.
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH that:
Section 1: Section 2 of this ordinance is of a general and permanent nature and shall be
codified.
Section 2: Kodiak Island Borough Code is amended to add a new chapter to read as follows:
Chapter 3.90 Marijuana Retail Sales Tax
3.90.010 Applicability, purpose, and authority.
A. Applicability. Unless provided otherwise, this chapter shall apply to the taxation of all retail
marijuana or marijuana product sales within the Kodiak Island Borough.
B. Purpose. The purpose of this chapter is to provide for the levy of a sales tax on all retail
marijuana or marijuana product sales within the Kodiak Island Borough, and the enforcement
of such tax.
C. Authority. This chapter is adopted pursuant to Alaska Statutes. The tax imposed under this
chapter does not apply to marijuana if the state of Alaska prohibits the levying of this tax under
AS 17.38.
3.90.020 Definitions.
Unless otherwise stated herein, the definitions in KIBC chapter 3.70 shall apply to this chapter.
Ordinance No. FY2027-05
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"Retailer" means any person or responsible party who is required to be licensed as a retail
marijuana store by the state of Alaska to sell marijuana or marijuana products to the public.
"Marijuana" means all parts of the plant of the genus cannabis whether growing or not, the seeds
thereof, the resin extracted from any part of the plant, and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or its resin, including marijuana
concentrate; "marijuana" does not include fiber produced from the stalks, oil or cake made from
the seeds of the plant, sterilized seed of the plant that is incapable of germination, the weight of
any other ingredient combined with marijuana to prepare topical or oral administrations, food,
drink, or other products, or industrial hemp as defined in AS 03.05.100.
3.90.030. Marijuana retail sales tax levied.
There is hereby levied an areawide sales tax equal to three percent (3%) of the sales price paid
on marijuana and marijuana products sold at retail within the Kodiak Island Borough. Every retailer
making a taxable retail sale under this chapter shall collect the retail marijuana sales tax from the
consumer at the time of collection of the sales price and shall deliver the same to the Borough in
accordance with the requirements of this chapter.
3.90.040 Failure to collect taxes.
A. A person required by this chapter to collect sales taxes levied who fails to collect such taxes
on taxable transactions shall be assessed with a civil penalty of double the tax that should
have been collected, as determined by an audit.
B. If any of the following defenses are established, the civil penalty imposed by this section shall
be waived:
1. The securing, in good faith, of a certificate of exemption or a statement of eligibility for
exemption from the person against whom the tax would have been levied;
2. Proof of a belief, based upon advice of legal counsel or the Borough finance director, that
the sale was not subject to the tax levied by this chapter, accompanied by proof of
notification in writing to the manager based on such belief prior to or immediately following
the transaction; or
3. A reasonable attempt, in good faith, to collect the tax from the buyer.
C. A person who fails to pay the tax levied by this chapter on a taxable transaction shall be
assessed with a civil penalty of double the taxes that should have been paid.
D. The civil penalties imposed by this section shall be in addition to any other civil or criminal
penalties imposed by this chapter.
3.90.050 Quarterly remittance.
The sales tax imposed under this chapter shall be collected by every retailer making a taxable
retail sale under this chapter and remitted to the Borough on a quarterly basis. Returns and
payments shall be submitted in a form prescribed by the Borough. Returns and payments shall
be submitted to the finance director in a form prescribed by the Borough on or before the last day
of the calendar month following the end of each calendar quarter. If the due date falls on a
Saturday, Sunday, or official Borough holiday, the due date shall be extended to the next business
day.
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3.90.060 Tax receipts to be segregated and held in trust for the Borough.
Taxes collected pursuant to this chapter belong to the Borough at the time collected from the
consumer by the retailer. The retailer has a fiduciary duty to the Borough for these taxes. The
taxes shall be segregated from the retailer's funds, at least by book account, and held in trust for
the exclusive benefit of the Borough until remitted to the Borough.
3.90.070 Exemptions. The following transactions are exempt from the tax levied by Chapter 3.90:
A. Sales of marijuana or marijuana products to a customer who is an officer or employee of a
foreign government which is exempt from taxation by law or treaty.
B. The tax imposed under this chapter does not apply to marijuana if the State of Alaska prohibits
the levying of this tax under AS 17.38.
3.90.080 Involuntary returns.
The provisions regarding involuntary returns in KIBC chapter 3.70.060 shall apply to this chapter.
3.90.090 Amended returns.
The provisions regarding amended returns in KIBC chapter 3.70.070 shall apply to this chapter.
3.90.100 Application of payments.
The provisions regarding application of payments in KIBC chapter 3.70.080 shall apply to this
chapter, except that the sales tax proceeds shall be credited to the quarterly tax period for which
it was remitted.
3.90.110 Prohibited acts and penalties.
The provisions in KIBC chapter 3.70.090 regarding prohibited acts by a marijuana cultivation
facility shall apply to marijuana retailers.
3.90.120 Civil fraud.
The provisions regarding civil fraud in KIBC chapter 3.70.100 shall apply to this chapter.
3.90.130 Tax lien.
The provisions regarding tax liens in KIBC chapter 3.70.110 shall apply to this chapter.
3.90.140 Interest on unpaid tax.
The provisions regarding interest on unpaid tax in KIBC chapter 3.70.120 shall apply to this
chapter.
3.90.150 Inspection and maintenance of documents and records.
A. Retail sale facilities shall keep complete and accurate records to support the information to
be included in the quarterly tax returns required by this chapter. The records must include
evidence sufficient to support all acquisitions of marijuana and marijuana products and retail
sale transactions and allowable deductions subject to this chapter, and all claimed exemptions
from payment, collection, or remittance of the retail marijuana sales under this chapter. All
such documents and records shall be preserved and maintained by the retailer for a minimum
period of three (3) years from the date of filing and shall be made available for inspection upon
request.
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B. Any person selling marijuana at a retail marijuana store who cannot produce records showing
taxes were paid on any marijuana in their possession is secondarily liable for the unpaid tax
on marijuana.
C. Persons subject to this chapter shall keep such other documents and records as the finance
director prescribes.
D. The finance director, the Borough Manager, or an authorized agent designated by either
official may, after 24-hour notice and during business hours, enter the business premises of
a licensee under this chapter, so far as it may be necessary for the purpose of examining such
products and the related business records.
3.90.160 Administrative regulations.
The finance director may adopt policies and procedures providing for the application and
interpretation of this chapter and provide forms for reporting and collecting the tax imposed by
this chapter.
3.90.170 Confidentiality of records.
The provisions regarding confidentiality of records in KIBC chapter 3.70.160 shall apply to this
chapter.
year.
3.90.190 Review.
The Assembly shall review the Marijuana Sales Tax and the CommURity Well_BeiRg FURd
General Fund no later than three (3) years after the effective date of this chapter to evaluate
revenues generated, administrative impacts, community benefits, and whether modifications
should be considered.
3.90.200 Retailer's certificate of registration.
A. All persons engaged in the retail sale of marijuana or marijuana products subject to the tax
imposed by this chapter shall file an application for a certificate of registration not later than
the date of commencing business in the Borough or opening a place of business within the
Borough.
B. No person may engage in business as a marijuana or marijuana products retailer without
obtaining a certificate of registration under this section. A retailer shall display their certificate
of registration prominently at their registered place of business.
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C. Application for a certificate of registration shall be made to the finance director. If a retailer
engages in business as a retailer at more than one location, the retailer shall obtain a
certificate of registration for each location. There shall be no charge for issuing a certificate
of registration.
D. A certificate of registration shall bear the name of the retailer, the address of the registered
place of business, and state the retailer's authority to collect the tax.
E. If a retailer ceases to engage in business as a retailer, ceases to engage in business at their
registered place of business, changes their name, or changes their form of business
organization, their certificate of registration shall expire. A retailer shall surrender an expired
certificate of registration to the finance director for cancellation.
Section 3: Election.
At the regular election to be held on October 6, 2026, the following question shall be placed before
the qualified voters of the Borough:
Shall the Kodiak Island Borough establish a new areawide sales tax of three
percent (3%) on the retail sale of marijuana and marijuana products, with
proceeds deposited into the Gemma pity Well Being Fund General Fund and
available for appropriation by the Assembly for programs, services, projects, and
grants related to health, education, and economic development, as provided by
ordinance?
Yes [ ] No [ ]
Section 4: Effective Date.
Section 2 of this ordinance shall become effective on January 1, 2027, provided a majority of the
qualified voters voting on the ballot proposition approve the ballot measure. Section 3 of this
ordinance shall be effective immediately upon its adoption by the Assembly, authorizing the
placement of the question on the October 6, 2026, ballot.
ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
THIS
KODIAK ISLAND BOROUGH
Jared Griffin, Borough Mayor
DAY OF , 2026
Introduced by: Assembly members Roberts and Woods
First reading:
Second reading/public hearing:
VOTES:
Ayes: Whiteside and Woods
Noes: Ames, Gardner, Smiley, and Vizcocho
ATTEST:
Nova M. Javier, MMC, Borough Clerk
Clerk's notes: At the 08/06/2026 regular meeting, this ordinance was amended by
substitution to include the definition of marijuana. It was again amended to state that the
proceeds will be deposited into the General Fund instead of a Community Well -Being Fund.
Ordinance No. FY2027-05
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